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Global Entrepreneurship
Developing Global Mindset for
Entrepreneurs
Brian David Butler

                               Teaching:
                               Brian Butler is currently a professor with Forum-Nexus,
                               which is co-sponsored by the IQS Business School of the
                               Ramon Llull University in Barcelona, and the
                               Catholic University of Milan. He teaches classes on
                               International Finance and Global Entrepreneurship in
brian.butler@forum-nexus.com   Europe every July and January.
briandbutler@gmail.com
LinkedIn/briandbutler
Skype: briandbutler            In Miami, Brian has taught Finance, Economics and Global
                               Trade at Thunderbird’s Global MBA program in Miami.

                               He previously worked as a research analyst at the
                               Columbia University Business School in New York
                               City.
Brian David Butler

                               International:
                               A global citizen, Brian was born in Canada, raised in
                               Switzerland (where he attended international British
                               school), educated through university in the U.S., started his
                               career with a Japanese company, moved to New York to
                               work as an analyst, married a Brazilian, and has traveled
brian.butler@forum-nexus.com   extensively in Latin America, Asia, Europe and North
briandbutler@gmail.com
LinkedIn/briandbutler          America.
Skype: briandbutler
                               Brian currently lives in Recife, Brazil where he is teaching
                               classes on ―Global Entrepreneurship‖ at the university
                               ―Faculdade Boa Viagem‖.
KookyPlan – wiki for Entrepreneurs
Global Entrepreneurship:
developing the global mindset for
entrepreneurs


Class #2
Saturday March 13th, 2010
Resources: www.kookyplan.com
notes
• Everyone should have received my email with
  the updated course syllabus
• Exam – will come mostly from my lectures.
• My presentations will all be placed online, I will
  email you the link www.slideshare.net
• Discuss next two weekends
• Make-up schedule during weeks?
• Group projects –
  ▫ Students should make teams,
  ▫ Change: allow one country to be Brazil (new)
1. Introduction, definitions:


Review from last
class…
Facebook vs. MySpace case study


 ▫       Who can summarize:
         ―what was the importance of international strategy
          for Facebook when competing with MySpace for
          market dominance in the US?‖
         Who can explain what we meant by ―network
          effects‖
International strategy = key

 ▫ ―Most of Facebook‘s growth is international,
   where they‘ve executed on a brilliant strategy for
   quickly rolling out localized versions of sites by
   getting their users to do the translation
   work for them (MySpace, by contrast, expands via
   a command-and-control infrastructure that puts
   people on the ground in each new international
   market).
Facebook growth international
• International Growth
• More than 70 translations available on the site
• About 70% of Facebook users are outside the
  United States
• Over 300,000 users helped translate the site
  through the translations application




                   http://www.facebook.com/press/info.php?statistics
Facebook growth international
• International growh = key to winning vs
  competition
• Massive growth in users

• Network effect = value of company… leads to
  more investment…leads to better user
  experience…leads to more users
Network effect
• In economics and business, a network
  effect (also called network externality) is
  the effect that one user of
  a good or service has on the value of that
  product to other people. When network effect
  is present, the value of a product or service
  increases as more people use it.
• The classic example is the telephone. The
  more people who own telephones, the more
  valuable the telephone is to each owner. This
  creates a positive externality because a user
  may purchase their phone without intending
  to create value for other users, but does so in
  any case.
• Online social networkswork in the same way,
  with sites like MySpace and Facebook being
  more useful the more users that join.
Global strategies vs.
Localization


What are ―global
industries‖?
Globalization

• ―international borders and trade barriers came
  down.
• Communism fell.
• Protectionist walls in Latin America and elsewhere
  were dismantled.
• Governments took a back seat to broader market
  forces.
• Thomas Friedman declared that the Internet and
  other planet-spanning technologies were erasing
  national boundaries. The world, he said in a 2005
  best seller, was flat.‖
Globalization
Why?
 some industries are much more globally
 competitive and need to be due to massive
 economies of scale advantage that can be
 obtained from Marketing products globally.

 Such industries as
 * computer manufacture where the products are
 standardized are prime candidates for global
 competition.
Globalization
• Types of “global” industries

• Luxury consumer goods
• Pharmaceutical
• Technology

Other potentially global(ish) industries
• Banking (but for local regulations)
• Internet (local regulations, language)
• Media (film) – local language
• Music (some)
• Others?
Globalization
• Not "Americanization"

• Note that globalization does not
  equal "americanization" ...
 ▫ proof is that there are just as many sushi
   restaurants as Mc Donalds,
 ▫ and Jackie Chan kung fu movies from Hong Kong
   might have as much global recognition as any
   American movement.
Globalization -- why?
• As travel costs have fallen,
• communication costs have fallen
• and the world has become more technologically integrated,

• As a result:
  ▫ we see new opportunities for even small companies to compete
    globally.

But, on the other hand, we also see company after company
 failing in global competition because they still think too US, or
 European-centric, and thus give up global market share to the
 "clones", or copy cat business models that pop up around the
 globe. See our discussion about troubles going global
 (business)
Localization

Sometimes, a company can make much more
 money by ―localizing‖ their products… but at
 what cost?

• Note: it costs $$ to localize (translate), and you
  might loose economies of scale
Localization

• Examples:
 ▫ Consumer goods
    Food
    Perfumes
    Local tastes, preferences, languages…
Localization

• counter trend in retailing
  ▫ consumers are resisting globalization
  ▫ going to the other extreme: localization, in which
    products are just sourced locally, grown locally,
    produced locally...
  ▫ consumers are drawn to the appeal of local
    industry (and are willing to pay more, and have
    slightly less choice for the privilege of supporting
    home-grown artists, farmers, and producers).
Localization v Globalization – how
much to localize?
• How much localization of your product should you
  make?
  ▫ If you are marketing a truely global brand, then maybe you
    dont want to change very much.
  ▫ But, maybe local requirements mean that you could sell
    more if you would modify your product.
  ▫ Each time you make modifications, you loose efficiency
    (which raises costs), but you might gain a local feel, and
    become more attractive to different markets.
  ▫ How much tradeoff should you make in efficiency loss for
    market share gain? This is the real trick of
    international marketing!
Localization v Globalization – how
much to localize?
• Localization leads to more sales, but globalization leads to
  more efficiency:
• Will you need to adapt to the local needs?
• Or, can you go with a more global-strategy, and market the
  product the same to every customer?
• The more you adapt the product / marketing mix, the higher
  your costs will be (and so the profits will be less), but you
  might find that you need to localize in order to boost sales
  volumes.
• Its a trade off, and one that needs careful consideration. The
  product adaptation issue is one of the most important
  decisions that an international marketer must make.
Localization
• Example:

• A Brazilian cachaca producer that considers selling
  in Spain might ask themselves: "How are we going
  to (and how much are we going to) localise the
  marketing of the brand in Spain? Rather than
  marketing the liquor the same to Spanish
  customers, we need to find out a way to make the
  branding appealing to the Spanish....how much
  customization will we offer?"
Localization
• How much "localization" is necessary?

• Luxury goods are one of the few truly "global"
  brands that are able to gain from global efficiency in
  marketing and producing the product exactly the
  same in any market that they enter. Without
  needing to tailorize (Localization) the products to
  meet local tastes, the companies are able to
  significantly save money on local costs. But, very
  few products are truly able to do so. Think Rolex.

• note that even Mercedez Benz is forced to localize.
2. The “entrepreneur mindset”:


Critical thinking
patterns of
entrepreneurs…
The “entrepreneur mindset”:
• Importance of
 ▫   critical thinking
 ▫   idealism,
 ▫   trend awareness,
 ▫   problem solving
• The importance of Critical Thinking for
  innovation
• ―Fail fast‖ and ―global learning‖
• Brainstorming
Critical thinking

•   Habit to ask ―what is wrong‖?
•   Look for problems
•   Try to ―poke holes‖ in story
•   What are the ―assumptions‖? Are they realistic?
•   What could be done better next time?
Idealism

•   How ―should the world be‖
•   Don‘t just look at the way thing are…
•   Dream how they ―should‖ be:
•   Is there a gap?
•   If so, what can / should be done to fix?
trend awareness

•   What is changing?
•   Are you aware of the changes?
•   Are you ready for the challenges?
•   Will it be you who takes advantage of the
    opportunities?
Problem solving

• Great entrepreneurs are ones that solve
  problems.
• Best ideas come from personal problems
Why solve problems:?
• ―Many of the applications we get are imitations
  of some existing company. That's one source of
  ideas, but not the best. If you look at the origins
  of successful startups, few were started in
  imitation of some other startup. Where did they
  get their ideas? Usually from some specific,
  unsolved problem the founders identified.‖


                      Y Combinator:
                      http://paulgraham.com/startupmistakes.html
Why solve problems:?
• It seems like the best problems to solve are ones that
  affect you personally. Apple happened because Steve
  Wozniak wanted a computer, Google because Larry and
  Sergey couldn't find stuff online, Hotmail because Sabeer
  Bhatia and Jack Smith couldn't exchange email at work.
 So instead of copying the Facebook, with some variation
 that the Facebook rightly ignored, look for ideas from
 the other direction. Instead of starting from companies
 and working back to the problems they solved, look for
 problems and imagine the company that might
 solve them. [2] What do people complain about? What
 do you wish there was?

                        Y Combinator:
“fast failing”
• ―The development of a successful new product, service, or
  business is often the result of lots of learning from lots of
  failures. The key is to fail fast and fail cheap. ―

• The idea
  ▫ Dont be afraid to try new business, but if its going to fail, don‘t be
    afraid to ‗fail fast‘ and move on. Don‘t stretch failure over 3-5
    painful years.
  ▫ The trick is to distinguish between a business that is doomed to
    fail, from the one that would succeed if only you tried a bit harder
    (not that many entrepreneurs fail from lack of full effort, and
    fighting through tough times)
  ▫ The challenge is to correctly use the 3-questions framework to
    make sure your new business is (a) solving a problem, (b) ahead
    of a trend, or (c ) localized properly.
  ▫ If, its not… and if the startup is doomed to fail… then fail fast!
  ▫ ―Fast fail‖ is a startup mentality for quickly starting up new
    businesses, popular within the startup community of Silicon
    Valley, USA
fast failing
• The classic mindset is to try to get a business plan or product
  95% right before taking action. This is great in theory, but it
  rarely works. Why? Because as soon as you ship the product
  you immediately recognize its fatal flaws. By then, it's often
  too late to change the packaging, the marketing, or the
  product itself.

• The alternative is to get your idea about 50% right, then let
  customers tell you what your mistakes are. Listen, learn, get it
  50% right, and put your idea through the process again. Keep
  at it until your customers say, "Wow!" Instead of debating
  options internally, you'll be making your idea real, taking it to
  customers, and learning as it fails.
fast failing
• Numbers

• The math of fail fast and fail cheap is simple. If it
  takes six months and $100,000 to take a product
  from idea to customer reaction, then at best
  you'll get two cycles in a year. However, if you
  can do a complete cycle of learning in a week for
  $1,000, you can get 52 cycles in a year at about
  half the cost.
Brain-storming
•   process of generating LOTS of ideas quickly
•   Think outside of the box
•   Original thinking
•   Key – don‘t be afraid of uncommon thoughts
Brainstorming


• ―a group creativity technique designed to
  generate a large number of ideas for the solution
  to a problem.‖
Keys to successful (focused)
brainstorming:
1. no judging, dont interrupt ideas
2. build on the ideas of others, rather than just adding your own new
   ideas
3. stay focused, and dont go off on tangents
4. get everyones involvement by allowing just one person to speak at a
   time. And make sure to also involve the shy ones
5. quantity, quantity, quantity.... try to get as many ideas as possible
   in as little time as possible. go, go, go.... a good idea will pop out as
   you break down the barriers of fear and judgement, and get caught
   up in the momentum
6. think out of the box, out of the room...out of this world....encourage
   wild ideas
7. be graphic, visual....sketch out the concept
8. make a prototype, but be FAST (a rough approximation right now
   is better than a perfect prototype a month from now!)
• Approach
• There are four basic rules in brainstorming.[5] These are intended to reduce
  the social inhibitions that occur in groups and therefore stimulate the
  generation of new ideas. The expected result is a dynamic synergy that will
  dramatically increase the creativity of the group.
•
• Focus on quantity: This rule is a means of enhancing divergent
  production, aiming to facilitate problem solving through the maxim,
  quantity breeds quality. The assumption is that the greater the number of
  ideas generated, the greater the chance of producing a radical and effective
  solution.
• No criticism: It is often emphasized that in group brainstorming, criticism
  should be put 'on hold'. Instead of immediately stating what might be
  wrong with an idea, the participants focus on extending or adding to it,
  reserving criticism for a later 'critical stage' of the process. By suspending
  judgment, one creates a supportive atmosphere where participants feel free
  to generate unusual ideas.
• Unusual ideas are welcome: To get a good and long list of ideas,
  unusual ideas are welcomed. They may open new ways of thinking and
  provide better solutions than regular ideas. They can be generated by
  looking from another perspective or setting aside assumptions.
• Combine and improve ideas: Good ideas can be combined to form a
  single very good idea, as suggested by the slogan "1+1=3". This approach is
  assumed to lead to better and more complete ideas than merely generating
  new ideas alone. It is believed to stimulate the building of ideas by a process
  of association.
2. why be an entrepreneur?


Class participation…
Review last week:
• What are the benefits of global
  entrepreneurship? What are the challenges?
  Can small enterprises really go global?


• Class discuss…
“Thinking global for entrepreneurs”
• Example: furniture company should look for global efficiencies and
  world wide centers of excellence.
• ideal structure
  ▫ design my products in cheapest / best place in world,
  ▫ manufacture in cheapest / best place in world,
  ▫ market with service and with warranty
  ▫ Offer a customized product (tailorization)
  ▫ keep on innovating (sustainable).
  ▫ locate my design center in New York City where competitive pressure
    and close proximity to global trends would keep us ahead of changing
    consumer demands.
  ▫ manufacture my furniture in the cheapest place possible for my desired
    level of quality, perhaps looking at China, India or Vietnam as potential
    sources.
  ▫ use flexibility to service customers before and after the sale, allowing
    them to customize their products.
“Thinking global for entrepreneurs”
• Example: furniture company should look for global
  efficiencies and world wide centers of excellence.
• ideal structure
  ▫ For my management structure, I would need to be flexible
    enough to allow for exchange rate changes, meaning that I might
    need to shift my production from one country to another if FX
    rates changed, and I would need to be flexible enough to shift
    with style changes and changes in consumer preferences.
  ▫ I would try to develop my worldwide learning, and realize that
    design innovations could come from everywhere.
  ▫ I would attempt to gather design trends and new ideas from all
    places (Maybe using internet wiki technology).
  ▫ But, more importantly than anything, if I were to really think like
    a transnational manager, I would have to shift my way of thinking
    away from a Brazilian furniture exporter, and to a ―global brand
    developer‖.
Why become an entrepreneur?

• Class: discussion – summarize here:

1.   .
2.   .
3.   .
4.   .
5.   .
What are Entrepreneurs “like”?
(personal characteristics/ attributes)

• Class: discussion – summarize here:

1.   .
2.   .
3.   .
4.   .
5.   .
What it means to be an
         "entrepreneur"?
• An Entrepreneur:
 ▫ is someone with big ideas, and a strong belief that
   they can make it happen.
 ▫ An entrepreneur is a risk taker, someone that is
   willing to lay it all on the line for the opportunity
   of big returns.



                                http://kookyplan.pbworks.com/
Risk

• Entrepreneurship is about taking risk.
• The behavior of the entrepreneur reflects a kind
  of person willing to put his or her career and
  financial security on the line and take risks in
  the name of an idea, spending much time as well
  as capital on an uncertain venture.


                             http://kookyplan.pbworks.com/
Types of entrepreneurs
1.       Lifestyle Entrepreneurs:
     ▫     Those that start up a business in a niche, making a living on
           their own, and satisfying the needs of a small group of clients
           that a bigger chain can not, or does not want to (yet). These
           entrepreneurs accept the rules of the game the way they are,
           and seek to exploit opportunities as the see them. This group
           of entrepreneurs should NOT seek Venture capital funding, and
           instead should look to self-fund, or look for a rich uncle (or a
           bank loan).
2.       Dreaming Big Entrepreneurs
     ▫     Those that launch a business with grand aspirations, that seek
           to "go national", or "go global".
     ▫     These entrepreneurs will find stiff competition from existing
           firms, and will succeed only if they find a way to change the
           rules of the game.
     ▫     They seek to create their own opportunities and to disrupt
           others business plans.
     ▫     These are the ones that often get venture capital funding.
                                                        http://kookyplan.pbworks.com/
• Characteristics of typical
  Entrepreneurs
• John G. Burch (Business Horizons, September 1986) lists traits
  typical of entrepreneurs:

• A desire to achieve:
  ▫ The push to conquer problems, and give birth to a successful venture.
• Hard work:
  ▫ It is often suggested that many entrepreneurs are workaholics.
• Desire to work for themselves:
  ▫ Entrepreneurs like to work for themselves rather than working for an
    organization or any other individual. They may work for someone to gain
    the knowledge of the product or service that they may want to produce.
• Nurturing quality:
  ▫ Willing to take charge of, and watch over a venture until it can stand
    alone.
• Acceptance of responsibility:
  ▫ Are morally, legally, and mentally accountable for their ventures. Some
    entrepreneurs may be driven more by altruism than by self-interest.
• Characteristics of typical
  Entrepreneurs
• Reward orientation:
  ▫ Desire to achieve, work hard, and take responsibility, but also with a
    commensurate desire to be rewarded handsomely for their efforts;
    rewards can be in forms other than money, such as recognition and
    respect.
• Optimism:
  ▫ Live by the philosophy that this is the best of times, and that anything is
    possible.
• Orientation to excellence:
  ▫ Often desire to achieve something outstanding that they can be proud of.
• Organization:
  ▫ Are good at bringing together the components (including people) of a
    venture.
• Profit orientation:
  ▫ Want to make a profit; but the profit serves primarily as a meter to gauge
    their success and achievement.

                                              http://kookyplan.pbworks.com/
Great for a resume (CV)


    • Note, if you do launch your business
      idea, and then later return to the market
      to try and find a job… all of these
      attributes are high demand:
•   1. Vision
•   2. Passion
•   3. Purpose
•   4. Adaptability
•   5. Leadership Skills
•   6. Networking Savvy
•   7. Determination
•   8. Positive attitude

                   http://kookyplan.pbworks.com/
What is an “entrepreneur”?
• Entrepreneurship merges the visionary and the
  pragmatic.
• It requires knowledge, imagination, perception,
  practicality, persistence, and attention to others.




                               http://kookyplan.pbworks.com/
What is an “entrepreneur”?
• …often is mistaken for—invention,
  creativity, management, starting a small
  business, or becoming self-employed, it is
  neither identical with nor reducible to any of
  them.
• The defining trait of entrepreneurship is the
  creation of a novel enterprise that the market is
  willing to adopt.

                              http://kookyplan.pbworks.com/
What is an “entrepreneur”?
• Hence, entrepreneurship entails
  the commercialization (or its functional
  equivalent) of an innovation.




                             http://kookyplan.pbworks.com/
What is an “entrepreneur”?
• The market judges utility and need along with
  excellence. It does not value—and does not need
  to value—every good idea.
• The entrepreneur‘s risk, therefore, is not
  a gamble but an informed calculation about
  the viability of the new enterprise in the market,
  about its capacity to meet a demand or need of
  others.

                              http://kookyplan.pbworks.com/
Can you teach
“entrepreneurship?”


Study from Kauffman
Foundation:
In high esteem:
• Entrepreneurs are among the most celebrated
  people in our culture.
• Celebrity entrepreneurs such as Steve Jobs
  (Apple), Bill Gates (Microsoft), Sergei Brin, and
  Larry Page (Google) often grace the covers of
  prominent publications.
• These company founders and innovators fuel
  economic growth and give the nation its
  competitive edge.

                           Techcrunch.com, by Vivek Wadhwa on Feb 27, 2010
But, Can Entrepreneurs Be Made?
Can you teach someone to be an entrepreneur?

The pessismists Say ―NO‖:
 ―Silicon Valley investors often have a picture in
 their heads of the type of person who is worthy
 of funding: young, brash, stubborn, and
 arrogant. They believe that successful
 entrepreneurs come from entrepreneurial
 families and that they start their entrepreneurial
 journey by selling lemonade while in grade
 school.
                           Techcrunch.com, by Vivek Wadhwa on Feb 27, 2010
Saying NO:

―Angel investor and entrepreneur, Jason Calacanis
  said as much in his recent talk to Penn State
  students.
And after meeting Wharton students, VC Fred Wilson
  expressed shock when a professor told him that you
  could teach people to be entrepreneurs.
Wilson wrote, ―I‘ve been working with
  entrepreneurs for almost 25 years now and it is
  ingrained in my mind that someone is either born an
  entrepreneur or is not.‖
                           Techcrunch.com, by Vivek Wadhwa on Feb 27, 2010
On the other hand…
Most successful entrepreneurs do NOT come from
 entrepreneurial families, and do NOT have
 entrepreneurial ―genes‖

• 52% of the successful entrepreneurs were the first in
  their immediate families to start a business — just
  like Bill Gates, Jeff Bezos, Larry Page, Sergei Brin,
  and Russell Simmons (Def Jam founder).
• Their parents were academics, lawyers, factory
  workers, priests, bureaucrats, etc.
• About 39% had an entrepreneurial father, and 7%
  had an entrepreneurial mother. (Some had both.)
                                Techcrunch.com, by Vivek Wadhwa on Feb 27
Saying “YES”:
  ▫ The education and training of entrepreneurs is
    something that the Kauffman Foundation has been
    researching extensively.
  ▫ Over the last six years, it has invested around $50
    million on academic research to understand what
    makes entrepreneurs tick and what policies are most
    conducive to entrepreneurship and to construct data
    bases to permit analyses of these subjects. (Kauffman
    has also funded some of my research at Duke, UC-
    Berkeley, and Harvard.)
• Its VP of Research, Bob Litan, says
  ▫ ―Kauffman has learnt conclusively that
    entrepreneurship can be taught!!”

                                  Techcrunch.com, by Vivek Wadhwa on Feb 27
Creating the “cluster”
• That is why Kauffman (which has a $2 billion endowment)
  is investing heavily in an ambitious new program
  called Kauffman Labs.
• This aims to dramatically increase the ability of small
  businesses to become big businesses.
• The Labs program is built around a novel idea: that highly
  motivated individuals with ―scalable ideas‖ can be recruited to
  be entrepreneur sand to be made successful, by
  surrounding them with a network of other
  experienced entrepreneurs; sources of money; and
  mentors.
• The goal is to educate entrepreneurs and surround them with
  a powerful network.
• This is like a Y Combinator on steroids.



                                      Techcrunch.com, by Vivek Wadhwa on Feb 27
Family + genes – important?
• More important are you social and professional
  networks

  ▫ ―I doubt that all of these Google employees who are
    starting successful businesses were born with
    entrepreneurial genes. ―

  ▫ VC and former entrepreneur Brad Feld
    also blogged about how many of his frat buddies at
    MIT had become successful entrepreneurs.

• Were all of these people born to be entrepreneurs as
  well? I don‘t think so.
                                  Techcrunch.com, by Vivek Wadhwa on Feb 27
What matters…

   • education,
   • exposure to entrepreneurship,
   • networks



                    Techcrunch.com, by Vivek Wadhwa on Feb 27
Do you need to start early?

• NO!

• Only a quarter caught the entrepreneurial bug
  when in college. Half didn‘t even think about
  entrepreneurship, and they had little interest in
  it when in school.




                               Techcrunch.com, by Vivek Wadhwa on Feb 27
Do you need a Harvard Education?

NO!

• Level of Education does matter — but not the
  college they graduate from.
• Significant difference between companies started by
  founders with just high-school diplomas and the
  rest.
• Education provided a huge advantage. But there
  wasn’t a big difference between firms
  founded by Ivy-league graduates and the
  graduates of other universities.
                               Techcrunch.com, by Vivek Wadhwa on Feb 27
Profile of successful (high-growth)
entrepreneurs
• Company founders tend to be middle-aged and
  well-educated, and did better in high school than
  in college
• These entrepreneurs tend to come from middle-
  class or upper-lower-class backgrounds, and
  were better educated and more entrepreneurial
  than their parents
• Most entrepreneurs are married and have
  children
• Early interest and propensity to start companies
                              Techcrunch.com, by Vivek Wadhwa on Feb 27
Profile of successful (high-growth)
entrepreneurs
• Top 4 Motivations for becoming
  entrepreneurs:

1.   building wealth,
2.   owning a company,
3.   startup culture, and c
4.   capitalizing on a business idea


                            Techcrunch.com, by Vivek Wadhwa on Feb 27
Profile of successful (high-growth)
entrepreneurs
• Not important or less-important factors:

1. inability to obtain employment
2. encouragement from others




                         Techcrunch.com, by Vivek Wadhwa on Feb 27
Profile of successful (high-growth)
entrepreneurs
• One common factor:

1. Most had significant industry
   experience when starting their
   companies




                         Techcrunch.com, by Vivek Wadhwa on Feb 27
Industry experience

• suggestion:

1. Go get a job, any job for 6 months – 1 year
   in the industry before launching your own
   venture (officially) .

 ▫   Personal experience: furniture example:
     wasted 3 years learning what I should have
     already known, and would have been taught
     had I taken a sales job at a competitor
                            Techcrunch.com, by Vivek Wadhwa on Feb 27
Profiles of Entrepreneurs
• One note: the profile of entrepreneurs outline
  above is slightly different for one group…..
Profile of successful (high-growth)
entrepreneurs
• But… the profile of “Early entrepreneurs” (young) and
  those with an early interest in entrepreneurship are
  different

  ▫ Entrepreneurs who started their companies soon after graduating (with
    zero to five years of work experience) and those who had an extremely
    strong interest in entrepreneurship in college were far less likely to be
    married (36.6 percent vs. the total sample average of 69.9 percent) or to
    have kids when they launched their first businesses (26.9 percent vs. the
    total sample average of 59.6 percent).
  ▫ Those who were ―extremely interested‖ in starting a company while in
    college were far more likely to be early entrepreneurs. Of these
    entrepreneurs, 69 percent started their companies within ten years of
    working for someone else (as compared to 46.8 percent from the rest of
    the population).
  ▫ Level of interest in entrepreneurship during college was correlated to the
    number of years worked before starting a business—only 18 percent from
    the ―extremely interested‖ group worked for at least fifteen years before
    starting their own businesses, as compared to 46.4 percent from the ―not
    very interested‖ group.
                                             Techcrunch.com, by Vivek Wadhwa on Feb 27
Homework from last class


Student presentations
(each student to
present)
Homework review
3-questions exercise

• Identify at least (1) major problem, (1) major trend, and
  (1) transferrable idea in:

• (a) locally – Recife
• (b) locally – Brazil
• ( c) globally – some other part of world, or worldwide

• Due next week – Maximum 1 page – word document –
  submit by email to : briandbutler@gmail.com
3-questions exercise – AGAIN – try to
   improve 2nd time!
Class Schedule: Topics to cover:
The “Three Questions” framework

• The ―three questions‖ framework
  1. ―what is the problem,
      and what are you going to do about it?‖;
 2. ―What is the trend?
      and how are you going to get in front of it?‖,
 3. ―what is great here / somewhere else?
      and where else could it work? how are you going to
       localize it? Where else could you bring this idea and
       find success?
Problem solving
 ▫ Problem solving: ―what is the problem, and
   what are you going to do about it?‖ Seeking
   Opportunities by solving problems.
Trends

 ▫ Trend awareness: ―What is the trend, and how
   are you going to get in front of it?‖ Analyzing
   trends to find opportunities. Increase student‘s
   awareness of global trends, and global business
   models.
 ▫ global changes
   technology, communications, capital markets,
    regulations, consumer tastes, credit availability,
    technology and more; and how they create
    opportunities for entrepreneurs
WIWH – localizing business models
• Localizing business models: WIWH: ―would it
  work here‖: a look at what is great here /
  somewhere else, and a systematic approach to
  analyzing potential of localizing foreign business
  models.
Homework Review – class participation
• Each student to present
  ▫ Front of class
  ▫ Top 2 ideas

• Students watching should
  ▫ Think critically
  ▫ Ask questions
  ▫ Challenge assumptions

• All students should take notes over the course of the
  semester
  ▫ Top problems (locally, nationally, globally)
  ▫ Top trends (l, n, g)
  ▫ Top transferrable ideas (l, n, g)
Homework review – my observations
Most did well locally,
Struggled globally

Most did well looking at (a) problems,
 and (c) ideas to transfer
But struggled with ―trends‖
Where to look for more trends and
inspiration ?…

• Some of my favorite sites….
Inspiration: Mundo S.A (globo)




              http://globonews.globo.com/Jornalismo/GN/0,,JOR315-
Springwise




             http://springwise.com/ideas/
Springwise

• Who is it for?
  ▫ Springwise is required brain food for
    entrepreneurial minds! Whether you're a budding
    entrepreneur, head of a start-up, management
    consultant, marketing manager, consumer
    insights expert, trend watcher, journalist, private
    investor, business development director, or
    venture capitalist, Springwise will instantly inspire
    you by getting the world's most promising new
    business ideas and young ventures right in front of
    you.
                              http://springwise.com/ideas/
Springwise
• Springwise scans the globe for the most promising
  business ventures, ideas and concepts that are ready for
  regional or international adaptation, expansion,
  partnering, investments or cooperation. We ferociously
  track more than 400 global offline and online business
  resources, as well as taking to the streets, cameras at
  hand.
• To ensure true ‗glocal‘ coverage, the central office is in
  close contact with more than 8,000 Springspotters in
  over 70 countries worldwide. Springwise's weekly
  newsletter, to which you can subscribe for free, is sent to
  more than 100,000 business professionals in more than
  120 countries.
• Springwise is the first company to compile and send out
  a newsletter like this on a global scale, making optimal
  use of an ever more networked world. Established in
  spring of 2002, Springwise is headquartered in
  Amsterdam, The Netherlands.
                                         http://springwise.com/ideas/
Trendwatching.com
A Brazilian version….
part 2: Global entrepreneurship class
VC thought-leaders
More Homework


Sorry!
Homework #1
   3-questions exercise – AGAIN – try
   to improve 2nd time!
• Identify at least (1) major problem, (1) major trend,
  and (1) transferrable idea in:

• (a) locally – Recife
• (b) locally – Brazil
• ( c) globally – some other part of world, or
  worldwide

• Due Saturday March 20th – Maximum 1 page – word
  document – submit by email to :
  briandbutler@gmail.com
3-questions exercise – AGAIN – try to
   improve 2nd time!
Homework #2
   Group Project
• Pick your group (3 students)
• All groups must deliver the following

  ▫ Proposed product/ service
  ▫ Proposed 2 countries
  ▫ Outline of major issues (cultural, technological,
    political, economic…for why it may / or may not work)

  ▫ Due: Saturday 27th 10am
  ▫ Word document 2 pages max
  ▫ submit by email to : briandbutler@gmail.com
Homework #3
   Social Media project
• To get ready for next class presentation on how global
  entrepreneurs can use social media to attract global clients:

• All students must signup for
  ▫ Twitter, facebook, linkedin
  ▫ Be prepared for discussion about ―social media‖ and
    entrepreneurship

• Extra credit +1 point for class participation: available to
  student that finds & connects with me on the most number of
  locations

  ▫ Due: Tursday, May 1st (before easter)
International IQ moment


Great stuff abroad you
should know exists!
Why?
• Travel abroad (in person, online, through media)


 ▫ Above all… learn to be curious about international
   places, people, cultures, businesses, events,
   politics, etc..

 ▫ Increase your international IQ every day!
Santorini, Greece
part 2: Global entrepreneurship class
Santorini, Greece
• Volcano
• Greek Island
• Santorini is essentially what remains of an
  enormous volcanic explosion, destroying the
  earliest settlements on what was formerly a
  single island, and leading to the creation of the
  current geological caldera.
International IQ moment


Great stuff abroad you
should know exists!
Mount St. Michael, France
Mount St. Michael, France
Mont Saint-Michel, France
•   Mont Saint-Michel (English: Saint Michael's Mount) is a rocky tidal island and a commune in
    Normandy, France (Le Mont-Saint-Michel).
•   Tidal island
•   Mont Saint-Michel was previously connected to the mainland via a thin natural land bridge, which before
    modernization was covered at high tide and revealed at low tide. This has been compromised by several
    developments. Over the centuries, the coastal flats have been polderised to create pasture. Thus the
    distance between the shore and the south coast of Mont-Saint-Michel has decreased. The Couesnon River
    has been canalised, reducing the flow of water and thereby encouraging a silting-up of the bay. In 1879,
    the land bridge was fortified into a true causeway. This prevented the tide from scouring the silt round
    the mount.
•   On 16 June 2006, the French prime minister and regional authorities announced a €164 million project
    (Projet Mont-Saint-Michel[1]) to build a hydraulic dam using the waters of the river Couesnon and of
    tides that will help remove the accumulated silt deposited by the uprising tides, and to make Mont-Saint-
    Michel an island again. It is expected to be completed by 2012.[2]
•   The construction of the dam is now complete (it was inaugurated in 2009). The project also includes the
    destruction of the causeway that was built on top of the small land bridge and enlarged, to join the island
    to the continent, but also used as a parking for visitors. It will be replaced by an elevated light bridge,
    under which the waters will flow more freely, and that will improve the efficiency of the now operational
    dam, and the construction of another parking on the continent. Visitors will have to use small shuttles to
    cross the future bridge which will still be open to walking people and unmotorized cycles.

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part 2: Global entrepreneurship class

  • 1. Global Entrepreneurship Developing Global Mindset for Entrepreneurs
  • 2. Brian David Butler Teaching: Brian Butler is currently a professor with Forum-Nexus, which is co-sponsored by the IQS Business School of the Ramon Llull University in Barcelona, and the Catholic University of Milan. He teaches classes on International Finance and Global Entrepreneurship in brian.butler@forum-nexus.com Europe every July and January. briandbutler@gmail.com LinkedIn/briandbutler Skype: briandbutler In Miami, Brian has taught Finance, Economics and Global Trade at Thunderbird’s Global MBA program in Miami. He previously worked as a research analyst at the Columbia University Business School in New York City.
  • 3. Brian David Butler International: A global citizen, Brian was born in Canada, raised in Switzerland (where he attended international British school), educated through university in the U.S., started his career with a Japanese company, moved to New York to work as an analyst, married a Brazilian, and has traveled brian.butler@forum-nexus.com extensively in Latin America, Asia, Europe and North briandbutler@gmail.com LinkedIn/briandbutler America. Skype: briandbutler Brian currently lives in Recife, Brazil where he is teaching classes on ―Global Entrepreneurship‖ at the university ―Faculdade Boa Viagem‖.
  • 4. KookyPlan – wiki for Entrepreneurs
  • 5. Global Entrepreneurship: developing the global mindset for entrepreneurs Class #2 Saturday March 13th, 2010
  • 7. notes • Everyone should have received my email with the updated course syllabus • Exam – will come mostly from my lectures. • My presentations will all be placed online, I will email you the link www.slideshare.net • Discuss next two weekends • Make-up schedule during weeks? • Group projects – ▫ Students should make teams, ▫ Change: allow one country to be Brazil (new)
  • 9. Facebook vs. MySpace case study ▫ Who can summarize:  ―what was the importance of international strategy for Facebook when competing with MySpace for market dominance in the US?‖  Who can explain what we meant by ―network effects‖
  • 10. International strategy = key ▫ ―Most of Facebook‘s growth is international, where they‘ve executed on a brilliant strategy for quickly rolling out localized versions of sites by getting their users to do the translation work for them (MySpace, by contrast, expands via a command-and-control infrastructure that puts people on the ground in each new international market).
  • 11. Facebook growth international • International Growth • More than 70 translations available on the site • About 70% of Facebook users are outside the United States • Over 300,000 users helped translate the site through the translations application http://www.facebook.com/press/info.php?statistics
  • 12. Facebook growth international • International growh = key to winning vs competition • Massive growth in users • Network effect = value of company… leads to more investment…leads to better user experience…leads to more users
  • 13. Network effect • In economics and business, a network effect (also called network externality) is the effect that one user of a good or service has on the value of that product to other people. When network effect is present, the value of a product or service increases as more people use it. • The classic example is the telephone. The more people who own telephones, the more valuable the telephone is to each owner. This creates a positive externality because a user may purchase their phone without intending to create value for other users, but does so in any case. • Online social networkswork in the same way, with sites like MySpace and Facebook being more useful the more users that join.
  • 14. Global strategies vs. Localization What are ―global industries‖?
  • 15. Globalization • ―international borders and trade barriers came down. • Communism fell. • Protectionist walls in Latin America and elsewhere were dismantled. • Governments took a back seat to broader market forces. • Thomas Friedman declared that the Internet and other planet-spanning technologies were erasing national boundaries. The world, he said in a 2005 best seller, was flat.‖
  • 16. Globalization Why? some industries are much more globally competitive and need to be due to massive economies of scale advantage that can be obtained from Marketing products globally. Such industries as * computer manufacture where the products are standardized are prime candidates for global competition.
  • 17. Globalization • Types of “global” industries • Luxury consumer goods • Pharmaceutical • Technology Other potentially global(ish) industries • Banking (but for local regulations) • Internet (local regulations, language) • Media (film) – local language • Music (some) • Others?
  • 18. Globalization • Not "Americanization" • Note that globalization does not equal "americanization" ... ▫ proof is that there are just as many sushi restaurants as Mc Donalds, ▫ and Jackie Chan kung fu movies from Hong Kong might have as much global recognition as any American movement.
  • 19. Globalization -- why? • As travel costs have fallen, • communication costs have fallen • and the world has become more technologically integrated, • As a result: ▫ we see new opportunities for even small companies to compete globally. But, on the other hand, we also see company after company failing in global competition because they still think too US, or European-centric, and thus give up global market share to the "clones", or copy cat business models that pop up around the globe. See our discussion about troubles going global (business)
  • 20. Localization Sometimes, a company can make much more money by ―localizing‖ their products… but at what cost? • Note: it costs $$ to localize (translate), and you might loose economies of scale
  • 21. Localization • Examples: ▫ Consumer goods  Food  Perfumes  Local tastes, preferences, languages…
  • 22. Localization • counter trend in retailing ▫ consumers are resisting globalization ▫ going to the other extreme: localization, in which products are just sourced locally, grown locally, produced locally... ▫ consumers are drawn to the appeal of local industry (and are willing to pay more, and have slightly less choice for the privilege of supporting home-grown artists, farmers, and producers).
  • 23. Localization v Globalization – how much to localize? • How much localization of your product should you make? ▫ If you are marketing a truely global brand, then maybe you dont want to change very much. ▫ But, maybe local requirements mean that you could sell more if you would modify your product. ▫ Each time you make modifications, you loose efficiency (which raises costs), but you might gain a local feel, and become more attractive to different markets. ▫ How much tradeoff should you make in efficiency loss for market share gain? This is the real trick of international marketing!
  • 24. Localization v Globalization – how much to localize? • Localization leads to more sales, but globalization leads to more efficiency: • Will you need to adapt to the local needs? • Or, can you go with a more global-strategy, and market the product the same to every customer? • The more you adapt the product / marketing mix, the higher your costs will be (and so the profits will be less), but you might find that you need to localize in order to boost sales volumes. • Its a trade off, and one that needs careful consideration. The product adaptation issue is one of the most important decisions that an international marketer must make.
  • 25. Localization • Example: • A Brazilian cachaca producer that considers selling in Spain might ask themselves: "How are we going to (and how much are we going to) localise the marketing of the brand in Spain? Rather than marketing the liquor the same to Spanish customers, we need to find out a way to make the branding appealing to the Spanish....how much customization will we offer?"
  • 26. Localization • How much "localization" is necessary? • Luxury goods are one of the few truly "global" brands that are able to gain from global efficiency in marketing and producing the product exactly the same in any market that they enter. Without needing to tailorize (Localization) the products to meet local tastes, the companies are able to significantly save money on local costs. But, very few products are truly able to do so. Think Rolex. • note that even Mercedez Benz is forced to localize.
  • 27. 2. The “entrepreneur mindset”: Critical thinking patterns of entrepreneurs…
  • 28. The “entrepreneur mindset”: • Importance of ▫ critical thinking ▫ idealism, ▫ trend awareness, ▫ problem solving • The importance of Critical Thinking for innovation • ―Fail fast‖ and ―global learning‖ • Brainstorming
  • 29. Critical thinking • Habit to ask ―what is wrong‖? • Look for problems • Try to ―poke holes‖ in story • What are the ―assumptions‖? Are they realistic? • What could be done better next time?
  • 30. Idealism • How ―should the world be‖ • Don‘t just look at the way thing are… • Dream how they ―should‖ be: • Is there a gap? • If so, what can / should be done to fix?
  • 31. trend awareness • What is changing? • Are you aware of the changes? • Are you ready for the challenges? • Will it be you who takes advantage of the opportunities?
  • 32. Problem solving • Great entrepreneurs are ones that solve problems. • Best ideas come from personal problems
  • 33. Why solve problems:? • ―Many of the applications we get are imitations of some existing company. That's one source of ideas, but not the best. If you look at the origins of successful startups, few were started in imitation of some other startup. Where did they get their ideas? Usually from some specific, unsolved problem the founders identified.‖ Y Combinator: http://paulgraham.com/startupmistakes.html
  • 34. Why solve problems:? • It seems like the best problems to solve are ones that affect you personally. Apple happened because Steve Wozniak wanted a computer, Google because Larry and Sergey couldn't find stuff online, Hotmail because Sabeer Bhatia and Jack Smith couldn't exchange email at work. So instead of copying the Facebook, with some variation that the Facebook rightly ignored, look for ideas from the other direction. Instead of starting from companies and working back to the problems they solved, look for problems and imagine the company that might solve them. [2] What do people complain about? What do you wish there was? Y Combinator:
  • 35. “fast failing” • ―The development of a successful new product, service, or business is often the result of lots of learning from lots of failures. The key is to fail fast and fail cheap. ― • The idea ▫ Dont be afraid to try new business, but if its going to fail, don‘t be afraid to ‗fail fast‘ and move on. Don‘t stretch failure over 3-5 painful years. ▫ The trick is to distinguish between a business that is doomed to fail, from the one that would succeed if only you tried a bit harder (not that many entrepreneurs fail from lack of full effort, and fighting through tough times) ▫ The challenge is to correctly use the 3-questions framework to make sure your new business is (a) solving a problem, (b) ahead of a trend, or (c ) localized properly. ▫ If, its not… and if the startup is doomed to fail… then fail fast! ▫ ―Fast fail‖ is a startup mentality for quickly starting up new businesses, popular within the startup community of Silicon Valley, USA
  • 36. fast failing • The classic mindset is to try to get a business plan or product 95% right before taking action. This is great in theory, but it rarely works. Why? Because as soon as you ship the product you immediately recognize its fatal flaws. By then, it's often too late to change the packaging, the marketing, or the product itself. • The alternative is to get your idea about 50% right, then let customers tell you what your mistakes are. Listen, learn, get it 50% right, and put your idea through the process again. Keep at it until your customers say, "Wow!" Instead of debating options internally, you'll be making your idea real, taking it to customers, and learning as it fails.
  • 37. fast failing • Numbers • The math of fail fast and fail cheap is simple. If it takes six months and $100,000 to take a product from idea to customer reaction, then at best you'll get two cycles in a year. However, if you can do a complete cycle of learning in a week for $1,000, you can get 52 cycles in a year at about half the cost.
  • 38. Brain-storming • process of generating LOTS of ideas quickly • Think outside of the box • Original thinking • Key – don‘t be afraid of uncommon thoughts
  • 39. Brainstorming • ―a group creativity technique designed to generate a large number of ideas for the solution to a problem.‖
  • 40. Keys to successful (focused) brainstorming: 1. no judging, dont interrupt ideas 2. build on the ideas of others, rather than just adding your own new ideas 3. stay focused, and dont go off on tangents 4. get everyones involvement by allowing just one person to speak at a time. And make sure to also involve the shy ones 5. quantity, quantity, quantity.... try to get as many ideas as possible in as little time as possible. go, go, go.... a good idea will pop out as you break down the barriers of fear and judgement, and get caught up in the momentum 6. think out of the box, out of the room...out of this world....encourage wild ideas 7. be graphic, visual....sketch out the concept 8. make a prototype, but be FAST (a rough approximation right now is better than a perfect prototype a month from now!)
  • 41. • Approach • There are four basic rules in brainstorming.[5] These are intended to reduce the social inhibitions that occur in groups and therefore stimulate the generation of new ideas. The expected result is a dynamic synergy that will dramatically increase the creativity of the group. • • Focus on quantity: This rule is a means of enhancing divergent production, aiming to facilitate problem solving through the maxim, quantity breeds quality. The assumption is that the greater the number of ideas generated, the greater the chance of producing a radical and effective solution. • No criticism: It is often emphasized that in group brainstorming, criticism should be put 'on hold'. Instead of immediately stating what might be wrong with an idea, the participants focus on extending or adding to it, reserving criticism for a later 'critical stage' of the process. By suspending judgment, one creates a supportive atmosphere where participants feel free to generate unusual ideas. • Unusual ideas are welcome: To get a good and long list of ideas, unusual ideas are welcomed. They may open new ways of thinking and provide better solutions than regular ideas. They can be generated by looking from another perspective or setting aside assumptions. • Combine and improve ideas: Good ideas can be combined to form a single very good idea, as suggested by the slogan "1+1=3". This approach is assumed to lead to better and more complete ideas than merely generating new ideas alone. It is believed to stimulate the building of ideas by a process of association.
  • 42. 2. why be an entrepreneur? Class participation…
  • 43. Review last week: • What are the benefits of global entrepreneurship? What are the challenges? Can small enterprises really go global? • Class discuss…
  • 44. “Thinking global for entrepreneurs” • Example: furniture company should look for global efficiencies and world wide centers of excellence. • ideal structure ▫ design my products in cheapest / best place in world, ▫ manufacture in cheapest / best place in world, ▫ market with service and with warranty ▫ Offer a customized product (tailorization) ▫ keep on innovating (sustainable). ▫ locate my design center in New York City where competitive pressure and close proximity to global trends would keep us ahead of changing consumer demands. ▫ manufacture my furniture in the cheapest place possible for my desired level of quality, perhaps looking at China, India or Vietnam as potential sources. ▫ use flexibility to service customers before and after the sale, allowing them to customize their products.
  • 45. “Thinking global for entrepreneurs” • Example: furniture company should look for global efficiencies and world wide centers of excellence. • ideal structure ▫ For my management structure, I would need to be flexible enough to allow for exchange rate changes, meaning that I might need to shift my production from one country to another if FX rates changed, and I would need to be flexible enough to shift with style changes and changes in consumer preferences. ▫ I would try to develop my worldwide learning, and realize that design innovations could come from everywhere. ▫ I would attempt to gather design trends and new ideas from all places (Maybe using internet wiki technology). ▫ But, more importantly than anything, if I were to really think like a transnational manager, I would have to shift my way of thinking away from a Brazilian furniture exporter, and to a ―global brand developer‖.
  • 46. Why become an entrepreneur? • Class: discussion – summarize here: 1. . 2. . 3. . 4. . 5. .
  • 47. What are Entrepreneurs “like”? (personal characteristics/ attributes) • Class: discussion – summarize here: 1. . 2. . 3. . 4. . 5. .
  • 48. What it means to be an "entrepreneur"? • An Entrepreneur: ▫ is someone with big ideas, and a strong belief that they can make it happen. ▫ An entrepreneur is a risk taker, someone that is willing to lay it all on the line for the opportunity of big returns. http://kookyplan.pbworks.com/
  • 49. Risk • Entrepreneurship is about taking risk. • The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture. http://kookyplan.pbworks.com/
  • 50. Types of entrepreneurs 1. Lifestyle Entrepreneurs: ▫ Those that start up a business in a niche, making a living on their own, and satisfying the needs of a small group of clients that a bigger chain can not, or does not want to (yet). These entrepreneurs accept the rules of the game the way they are, and seek to exploit opportunities as the see them. This group of entrepreneurs should NOT seek Venture capital funding, and instead should look to self-fund, or look for a rich uncle (or a bank loan). 2. Dreaming Big Entrepreneurs ▫ Those that launch a business with grand aspirations, that seek to "go national", or "go global". ▫ These entrepreneurs will find stiff competition from existing firms, and will succeed only if they find a way to change the rules of the game. ▫ They seek to create their own opportunities and to disrupt others business plans. ▫ These are the ones that often get venture capital funding. http://kookyplan.pbworks.com/
  • 51. • Characteristics of typical Entrepreneurs • John G. Burch (Business Horizons, September 1986) lists traits typical of entrepreneurs: • A desire to achieve: ▫ The push to conquer problems, and give birth to a successful venture. • Hard work: ▫ It is often suggested that many entrepreneurs are workaholics. • Desire to work for themselves: ▫ Entrepreneurs like to work for themselves rather than working for an organization or any other individual. They may work for someone to gain the knowledge of the product or service that they may want to produce. • Nurturing quality: ▫ Willing to take charge of, and watch over a venture until it can stand alone. • Acceptance of responsibility: ▫ Are morally, legally, and mentally accountable for their ventures. Some entrepreneurs may be driven more by altruism than by self-interest.
  • 52. • Characteristics of typical Entrepreneurs • Reward orientation: ▫ Desire to achieve, work hard, and take responsibility, but also with a commensurate desire to be rewarded handsomely for their efforts; rewards can be in forms other than money, such as recognition and respect. • Optimism: ▫ Live by the philosophy that this is the best of times, and that anything is possible. • Orientation to excellence: ▫ Often desire to achieve something outstanding that they can be proud of. • Organization: ▫ Are good at bringing together the components (including people) of a venture. • Profit orientation: ▫ Want to make a profit; but the profit serves primarily as a meter to gauge their success and achievement. http://kookyplan.pbworks.com/
  • 53. Great for a resume (CV) • Note, if you do launch your business idea, and then later return to the market to try and find a job… all of these attributes are high demand:
  • 54. 1. Vision • 2. Passion • 3. Purpose • 4. Adaptability • 5. Leadership Skills • 6. Networking Savvy • 7. Determination • 8. Positive attitude http://kookyplan.pbworks.com/
  • 55. What is an “entrepreneur”? • Entrepreneurship merges the visionary and the pragmatic. • It requires knowledge, imagination, perception, practicality, persistence, and attention to others. http://kookyplan.pbworks.com/
  • 56. What is an “entrepreneur”? • …often is mistaken for—invention, creativity, management, starting a small business, or becoming self-employed, it is neither identical with nor reducible to any of them. • The defining trait of entrepreneurship is the creation of a novel enterprise that the market is willing to adopt. http://kookyplan.pbworks.com/
  • 57. What is an “entrepreneur”? • Hence, entrepreneurship entails the commercialization (or its functional equivalent) of an innovation. http://kookyplan.pbworks.com/
  • 58. What is an “entrepreneur”? • The market judges utility and need along with excellence. It does not value—and does not need to value—every good idea. • The entrepreneur‘s risk, therefore, is not a gamble but an informed calculation about the viability of the new enterprise in the market, about its capacity to meet a demand or need of others. http://kookyplan.pbworks.com/
  • 59. Can you teach “entrepreneurship?” Study from Kauffman Foundation:
  • 60. In high esteem: • Entrepreneurs are among the most celebrated people in our culture. • Celebrity entrepreneurs such as Steve Jobs (Apple), Bill Gates (Microsoft), Sergei Brin, and Larry Page (Google) often grace the covers of prominent publications. • These company founders and innovators fuel economic growth and give the nation its competitive edge. Techcrunch.com, by Vivek Wadhwa on Feb 27, 2010
  • 61. But, Can Entrepreneurs Be Made? Can you teach someone to be an entrepreneur? The pessismists Say ―NO‖: ―Silicon Valley investors often have a picture in their heads of the type of person who is worthy of funding: young, brash, stubborn, and arrogant. They believe that successful entrepreneurs come from entrepreneurial families and that they start their entrepreneurial journey by selling lemonade while in grade school. Techcrunch.com, by Vivek Wadhwa on Feb 27, 2010
  • 62. Saying NO: ―Angel investor and entrepreneur, Jason Calacanis said as much in his recent talk to Penn State students. And after meeting Wharton students, VC Fred Wilson expressed shock when a professor told him that you could teach people to be entrepreneurs. Wilson wrote, ―I‘ve been working with entrepreneurs for almost 25 years now and it is ingrained in my mind that someone is either born an entrepreneur or is not.‖ Techcrunch.com, by Vivek Wadhwa on Feb 27, 2010
  • 63. On the other hand… Most successful entrepreneurs do NOT come from entrepreneurial families, and do NOT have entrepreneurial ―genes‖ • 52% of the successful entrepreneurs were the first in their immediate families to start a business — just like Bill Gates, Jeff Bezos, Larry Page, Sergei Brin, and Russell Simmons (Def Jam founder). • Their parents were academics, lawyers, factory workers, priests, bureaucrats, etc. • About 39% had an entrepreneurial father, and 7% had an entrepreneurial mother. (Some had both.) Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 64. Saying “YES”: ▫ The education and training of entrepreneurs is something that the Kauffman Foundation has been researching extensively. ▫ Over the last six years, it has invested around $50 million on academic research to understand what makes entrepreneurs tick and what policies are most conducive to entrepreneurship and to construct data bases to permit analyses of these subjects. (Kauffman has also funded some of my research at Duke, UC- Berkeley, and Harvard.) • Its VP of Research, Bob Litan, says ▫ ―Kauffman has learnt conclusively that entrepreneurship can be taught!!” Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 65. Creating the “cluster” • That is why Kauffman (which has a $2 billion endowment) is investing heavily in an ambitious new program called Kauffman Labs. • This aims to dramatically increase the ability of small businesses to become big businesses. • The Labs program is built around a novel idea: that highly motivated individuals with ―scalable ideas‖ can be recruited to be entrepreneur sand to be made successful, by surrounding them with a network of other experienced entrepreneurs; sources of money; and mentors. • The goal is to educate entrepreneurs and surround them with a powerful network. • This is like a Y Combinator on steroids. Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 66. Family + genes – important? • More important are you social and professional networks ▫ ―I doubt that all of these Google employees who are starting successful businesses were born with entrepreneurial genes. ― ▫ VC and former entrepreneur Brad Feld also blogged about how many of his frat buddies at MIT had become successful entrepreneurs. • Were all of these people born to be entrepreneurs as well? I don‘t think so. Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 67. What matters… • education, • exposure to entrepreneurship, • networks Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 68. Do you need to start early? • NO! • Only a quarter caught the entrepreneurial bug when in college. Half didn‘t even think about entrepreneurship, and they had little interest in it when in school. Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 69. Do you need a Harvard Education? NO! • Level of Education does matter — but not the college they graduate from. • Significant difference between companies started by founders with just high-school diplomas and the rest. • Education provided a huge advantage. But there wasn’t a big difference between firms founded by Ivy-league graduates and the graduates of other universities. Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 70. Profile of successful (high-growth) entrepreneurs • Company founders tend to be middle-aged and well-educated, and did better in high school than in college • These entrepreneurs tend to come from middle- class or upper-lower-class backgrounds, and were better educated and more entrepreneurial than their parents • Most entrepreneurs are married and have children • Early interest and propensity to start companies Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 71. Profile of successful (high-growth) entrepreneurs • Top 4 Motivations for becoming entrepreneurs: 1. building wealth, 2. owning a company, 3. startup culture, and c 4. capitalizing on a business idea Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 72. Profile of successful (high-growth) entrepreneurs • Not important or less-important factors: 1. inability to obtain employment 2. encouragement from others Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 73. Profile of successful (high-growth) entrepreneurs • One common factor: 1. Most had significant industry experience when starting their companies Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 74. Industry experience • suggestion: 1. Go get a job, any job for 6 months – 1 year in the industry before launching your own venture (officially) . ▫ Personal experience: furniture example: wasted 3 years learning what I should have already known, and would have been taught had I taken a sales job at a competitor Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 75. Profiles of Entrepreneurs • One note: the profile of entrepreneurs outline above is slightly different for one group…..
  • 76. Profile of successful (high-growth) entrepreneurs • But… the profile of “Early entrepreneurs” (young) and those with an early interest in entrepreneurship are different ▫ Entrepreneurs who started their companies soon after graduating (with zero to five years of work experience) and those who had an extremely strong interest in entrepreneurship in college were far less likely to be married (36.6 percent vs. the total sample average of 69.9 percent) or to have kids when they launched their first businesses (26.9 percent vs. the total sample average of 59.6 percent). ▫ Those who were ―extremely interested‖ in starting a company while in college were far more likely to be early entrepreneurs. Of these entrepreneurs, 69 percent started their companies within ten years of working for someone else (as compared to 46.8 percent from the rest of the population). ▫ Level of interest in entrepreneurship during college was correlated to the number of years worked before starting a business—only 18 percent from the ―extremely interested‖ group worked for at least fifteen years before starting their own businesses, as compared to 46.4 percent from the ―not very interested‖ group. Techcrunch.com, by Vivek Wadhwa on Feb 27
  • 77. Homework from last class Student presentations (each student to present)
  • 78. Homework review 3-questions exercise • Identify at least (1) major problem, (1) major trend, and (1) transferrable idea in: • (a) locally – Recife • (b) locally – Brazil • ( c) globally – some other part of world, or worldwide • Due next week – Maximum 1 page – word document – submit by email to : briandbutler@gmail.com
  • 79. 3-questions exercise – AGAIN – try to improve 2nd time!
  • 80. Class Schedule: Topics to cover: The “Three Questions” framework • The ―three questions‖ framework 1. ―what is the problem,  and what are you going to do about it?‖; 2. ―What is the trend?  and how are you going to get in front of it?‖, 3. ―what is great here / somewhere else?  and where else could it work? how are you going to localize it? Where else could you bring this idea and find success?
  • 81. Problem solving ▫ Problem solving: ―what is the problem, and what are you going to do about it?‖ Seeking Opportunities by solving problems.
  • 82. Trends ▫ Trend awareness: ―What is the trend, and how are you going to get in front of it?‖ Analyzing trends to find opportunities. Increase student‘s awareness of global trends, and global business models. ▫ global changes  technology, communications, capital markets, regulations, consumer tastes, credit availability, technology and more; and how they create opportunities for entrepreneurs
  • 83. WIWH – localizing business models • Localizing business models: WIWH: ―would it work here‖: a look at what is great here / somewhere else, and a systematic approach to analyzing potential of localizing foreign business models.
  • 84. Homework Review – class participation • Each student to present ▫ Front of class ▫ Top 2 ideas • Students watching should ▫ Think critically ▫ Ask questions ▫ Challenge assumptions • All students should take notes over the course of the semester ▫ Top problems (locally, nationally, globally) ▫ Top trends (l, n, g) ▫ Top transferrable ideas (l, n, g)
  • 85. Homework review – my observations Most did well locally, Struggled globally Most did well looking at (a) problems, and (c) ideas to transfer But struggled with ―trends‖
  • 86. Where to look for more trends and inspiration ?… • Some of my favorite sites….
  • 87. Inspiration: Mundo S.A (globo) http://globonews.globo.com/Jornalismo/GN/0,,JOR315-
  • 88. Springwise http://springwise.com/ideas/
  • 89. Springwise • Who is it for? ▫ Springwise is required brain food for entrepreneurial minds! Whether you're a budding entrepreneur, head of a start-up, management consultant, marketing manager, consumer insights expert, trend watcher, journalist, private investor, business development director, or venture capitalist, Springwise will instantly inspire you by getting the world's most promising new business ideas and young ventures right in front of you. http://springwise.com/ideas/
  • 90. Springwise • Springwise scans the globe for the most promising business ventures, ideas and concepts that are ready for regional or international adaptation, expansion, partnering, investments or cooperation. We ferociously track more than 400 global offline and online business resources, as well as taking to the streets, cameras at hand. • To ensure true ‗glocal‘ coverage, the central office is in close contact with more than 8,000 Springspotters in over 70 countries worldwide. Springwise's weekly newsletter, to which you can subscribe for free, is sent to more than 100,000 business professionals in more than 120 countries. • Springwise is the first company to compile and send out a newsletter like this on a global scale, making optimal use of an ever more networked world. Established in spring of 2002, Springwise is headquartered in Amsterdam, The Netherlands. http://springwise.com/ideas/
  • 96. Homework #1 3-questions exercise – AGAIN – try to improve 2nd time! • Identify at least (1) major problem, (1) major trend, and (1) transferrable idea in: • (a) locally – Recife • (b) locally – Brazil • ( c) globally – some other part of world, or worldwide • Due Saturday March 20th – Maximum 1 page – word document – submit by email to : briandbutler@gmail.com
  • 97. 3-questions exercise – AGAIN – try to improve 2nd time!
  • 98. Homework #2 Group Project • Pick your group (3 students) • All groups must deliver the following ▫ Proposed product/ service ▫ Proposed 2 countries ▫ Outline of major issues (cultural, technological, political, economic…for why it may / or may not work) ▫ Due: Saturday 27th 10am ▫ Word document 2 pages max ▫ submit by email to : briandbutler@gmail.com
  • 99. Homework #3 Social Media project • To get ready for next class presentation on how global entrepreneurs can use social media to attract global clients: • All students must signup for ▫ Twitter, facebook, linkedin ▫ Be prepared for discussion about ―social media‖ and entrepreneurship • Extra credit +1 point for class participation: available to student that finds & connects with me on the most number of locations ▫ Due: Tursday, May 1st (before easter)
  • 100. International IQ moment Great stuff abroad you should know exists!
  • 101. Why? • Travel abroad (in person, online, through media) ▫ Above all… learn to be curious about international places, people, cultures, businesses, events, politics, etc.. ▫ Increase your international IQ every day!
  • 104. Santorini, Greece • Volcano • Greek Island • Santorini is essentially what remains of an enormous volcanic explosion, destroying the earliest settlements on what was formerly a single island, and leading to the creation of the current geological caldera.
  • 105. International IQ moment Great stuff abroad you should know exists!
  • 108. Mont Saint-Michel, France • Mont Saint-Michel (English: Saint Michael's Mount) is a rocky tidal island and a commune in Normandy, France (Le Mont-Saint-Michel). • Tidal island • Mont Saint-Michel was previously connected to the mainland via a thin natural land bridge, which before modernization was covered at high tide and revealed at low tide. This has been compromised by several developments. Over the centuries, the coastal flats have been polderised to create pasture. Thus the distance between the shore and the south coast of Mont-Saint-Michel has decreased. The Couesnon River has been canalised, reducing the flow of water and thereby encouraging a silting-up of the bay. In 1879, the land bridge was fortified into a true causeway. This prevented the tide from scouring the silt round the mount. • On 16 June 2006, the French prime minister and regional authorities announced a €164 million project (Projet Mont-Saint-Michel[1]) to build a hydraulic dam using the waters of the river Couesnon and of tides that will help remove the accumulated silt deposited by the uprising tides, and to make Mont-Saint- Michel an island again. It is expected to be completed by 2012.[2] • The construction of the dam is now complete (it was inaugurated in 2009). The project also includes the destruction of the causeway that was built on top of the small land bridge and enlarged, to join the island to the continent, but also used as a parking for visitors. It will be replaced by an elevated light bridge, under which the waters will flow more freely, and that will improve the efficiency of the now operational dam, and the construction of another parking on the continent. Visitors will have to use small shuttles to cross the future bridge which will still be open to walking people and unmotorized cycles.